Concerned Citizens for Responsible Gov't v. W. Point Fire Prot. Dist.

• Decision Date: 19 October 2011
• Docket Number: No. C061110.,C061110.
• Citation: 196 Cal.App.4th 1427,11 Cal. Daily Op. Serv. 8121,127 Cal.Rptr.3d 783
• Court: California Court of Appeals
• Parties: CONCERNED CITIZENS FOR RESPONSIBLE GOVERNMENT et al., Plaintiffs and Appellants, v. WEST POINT FIRE PROTECTION DISTRICT et al., Defendants and Appellants.

127 Cal.Rptr.3d 783

11 Cal. Daily Op. Serv. 8121

2011 Daily Journal D.A.R. 9715Review GrantedPreviously published at: 196 Cal.App.4th 1427

CONCERNED CITIZENS FOR RESPONSIBLE GOVERNMENT et al., Plaintiffs and Appellants,

v.WEST POINT FIRE PROTECTION DISTRICT et al., Defendants and Appellants.

No. C061110.

Court of Appeal, Third District, California.

June 29, 2011.

Review Granted Oct. 19, 2011.

Certified for Partial Publication.^*

Background:Plaintiffs filed reverse validation action, claiming that new rural fire protection district assessment, passed after an election, violated Proposition 218 restricting a public agency's ability to impose special assessments.The Superior Court, Calaveras County, No. CV33828,John E. Griffin, Jr., J., entered judgment against plaintiffs, and plaintiffs appealed.

Holdings:The Court of Appeal, Butz, J., held that:

(1) assessment did not confer special benefits on specific parcels sufficient to qualify as a special assessment, and

(2) assessment violated proportionality requirements.

Reversed.

Butz, J., concurred separately with opinion.

Stephanie J. Finelli, Sacramento; and Robert K. Reeve, Valley Springs, for Plaintiffs and Appellants.

Nossaman LLP, San Francisco, and Stephen N. Roberts for Defendants and Appellants.

BUTZ, J.

Squeezed by a lack of resources from existing tax revenues, the tiny, rural West Point Fire Protection District(the District) decided to levy what it called a “special assessment” that would bring in $146,000 per year for additional fire suppression services.The District commissioned an engineer's report that created a three-tiered structure for imposing assessment fees, purporting to allocate the assessments based on the “special benefits” accruing to improved and unimproved properties from enhanced fire protection services.

An election was held, the assessment passed by 62 percent of the vote, and the District's board passed a resolution to levy the assessments.The resolution authorized the County of Calaveras to collect the assessments beginning with the 2007–2008 tax year.

Plaintiffs and appellants Concerned Citizens for Responsible Government and William Doherty(collectively Concerned Citizens) filed this reverse validation action, claiming the new assessment violated the provisions of Proposition 218, ¹ which restricts a public agency's ability to impose special assessments.The trial court ruled against Concerned Citizens, finding that the assessment was valid.It also awarded the District more than $104,000 in attorney fees.

We shall reverse the judgment because the assessment did not comport with the substantive provisions of Proposition 218, as elucidated by the California Supreme Court in Silicon Valley Taxpayers Assn., Inc. v. Santa Clara County Open Space Authority(2008)44 Cal.4th 431, 79 Cal.Rptr.3d 312, 187 P.3d 37( Silicon Valley ).This disposition also necessitates reversal of the attorney fee award.

We shall also reject the District's fallback arguments that, due to procedural defects, the lawsuit should have been dismissed at its inception.

FACTUAL AND PROCEDURAL BACKGROUND

The District is a special district located in Calaveras County that was formed in 1948 for the purpose of responding to structural fires, wildland fires, vehicle accidents and medical emergencies within its borders.The District encompasses 2,364 parcels and generates $149,000 in property taxes to meet its community service obligations.

Between 2000 and 2006, there was a 340 percent growth in service calls within the District.However, this increase was not being matched by increases in revenue.At a special meeting of the District's board in May 2006, the directors discussed a benefit assessment that would generate an additional $130,000 to $150,000 in revenue.

An engineer's report was commissioned in purported compliance with the requirements of Proposition 218.The engineer noted the lack of sufficient resources to provide fire suppression services 24 hours per day, seven days per week, and recommended the “low cost” solution of a ballot assessment to generate the needed additional revenue.The report identified three “goals” to be achieved: (1) to “make missed calls for assistance a ‘thing of the past’ ” by providing at least one full-time emergency medical technician (EMT) senior firefighter on duty at all times; (2) to increase the number of volunteer firefighters on duty at any given time; and (3) to “[e]mpower the community” and hold the District accountable by conducting periodic town hall meetings and reviewing the assessment every five years.

The report calculated that it would cost the District $146,000 to keep one senior firefighter on duty around the clock.The report used a methodology taken from a 1995 law review article to calculate the benefits (based on proportionate costs) conferred on three different types of parcel owners—improved, unimproved and exempt ²—for fire protection services.

Acknowledging that under Proposition 218 only “special benefits” to each parcel could be subject to the assessment, the report purported to separate “special benefits” conferred upon the parcels from the “general benefits” accruing to the community at large.In order to reach the goal of an additional $146,000 in funds for increased fire suppression, the report proposed the following allocation of assessments: Improved parcels—$87.58, unimproved parcels—$45, exempt parcels—$0.

Following receipt of the engineer's report, the District conducted an election in which each parcel owner was asked to vote on the proposed assessment.The ballot counting started on April 19, 2007, (all further unspecified calendar dates are to that year) and the final results were certified on April 22.The measure passed, with 61.8 percent voting in favor and 38.1 percent voting against.

PROCEDURAL HISTORY

Filing of the Lawsuit and Service of Summons

On June 14, the District adopted ResolutionNo. 07–06, authorizing the imposition of the assessments recommended in the engineer's report.The resolution authorized Calaveras County to collect the assessment for the District and to deduct 1 percent from the billed assessment as an administrative cost.On June 21, Concerned Citizens filed the present lawsuit as a “reverse validation” action, requesting judicial invalidation of the assessment.(Code Civ. Proc., §§ 860,863;³Kaatz v. City of Seaside(2006)143 Cal.App.4th 13, 30, fn. 16, 49 Cal.Rptr.3d 95.)A first amended complaint was filed on July 13.

On August 10, Concerned Citizens filed proof of publication of summons, showing service on July 20, July 27 and August 3.(§ 861.)

The District filed a motion to quash service, contending that the form of publication was improper.On October 10, the court granted the motion, citing defects in the proofs of service.

In the meantime, Concerned Citizens applied ex parte and was granted an extension until November 5 to allow further publication of summons.Additional rounds of publication occurred on October 16, 23 and 30.

On November 5, the District moved to dismiss the action for lack of jurisdiction, based on improper publication of summons.On December 3, Concerned Citizens applied ex parte and was granted another extension, until December 14, to file proof of service.

On December 12, the trial court denied the District's motion to dismiss.The next day, Concerned Citizens filed an ex parte application to extend time for filing proof of publication of summons until December 17.Although the application was denied, a proof of service was filed on December 17, showing publication had occurred on November 30, December 7 and December 14.

Pointing out that Concerned Citizens' proof of publication was filed a day late without court permission, the District moved for reconsideration of the denial of its motion to dismiss.The court agreed to reconsider its prior order but reaffirmed its denial of the motion to dismiss.The District then sought relief in this court by way of petition for writ of mandate and/or prohibition, seeking to overturn the trial court's refusal to dismiss the case.( West Point Fire Protection District v. Superior Court,No. C058426.)We denied the petition without comment on April 30, 2008.

Trial, Judgment and Postjudgment Events

After Concerned Citizens filed a second amended complaint, the case was tried before assigned Judge John E. Griffin, Jr.

The trial court ruled against Concerned Citizens and in favor of the District on all causes of action.The court ruled that “the benefit assessment was legally created and passed, and is determined to be valid.”

After entry of judgment, the District moved to recover its attorney fees, either as the prevailing party or as a discovery sanction for the wrongful failure to admit certain requests for admission.The court granted the motion and awarded the District $104,153 in attorney fees, finding that Concerned Citizens had unreasonably denied the District's requests for admissions, thereby requiring the District to defend Concerned Citizens' claims at trial.

Concerned Citizens appeals from the judgment and from the order awarding attorney fees to the District.The District filed a notice of cross-appeal from the denials of its motion to dismiss and motion for reconsideration.

DISCUSSION

I.The Trial Court's Refusal to Dismiss^**

II.Validity of the Assessment

A.History and Overview of Proposition 218

Proposition 218 was passed in 1996 as a constitutional adjunct to Proposition 13.(SeeBeutz v. County of Riverside(2010)184 Cal.App.4th 1516, 1519, 109 Cal.Rptr.3d 851( Beutz ).)Proposition 13, which was passed in 1978, “ ‘limited ad valorem property taxes to 1 percent of a property's assessed valuation and limited increases in the assessed valuation to 2 percent per year unless and until the property changed hands.’ ”( Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles(2001)24 Cal.4th 830, 836, 102 Cal.Rptr.2d 719, 14 P.3d 930( Apartment Assn.), ci...